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PROJECT INFORMATION DOCUMENT (PID) 
APPRAISAL STAGE 
Report No.:  AB5719 
 
(The report # is automatically generated by IDU and should not be changed)
 
Project Name 
BR Federal Integrated Water Sector Project - Interaguas 
Region 
LATIN AMERICA AND CARIBBEAN 
Country 
FEDERAL REPUBLIC OF BRAZIL 
Sector 
Public administration- Water, sanitation and flood protection 
(100%) 
Lending Instrument 
SIL 
Project ID 
P112073 
Parent Project ID 
PE-P112073-LEN-BB 
Borrower(s) 
FEDERAL REPUBLIC OF BRAZIL 
Implementing Agency 
Ministerio do Meio Ambiente 
SEPN 505 Bl B Sala 20 
Brasilia DF 
Brazil 
70730-542 
Tel: (55-61) 3105-2100 Fax: (55-61) 3105-2015 
silverio.costa@mma.gov.br 
Ministerio das Cidades, SNSA 
SAUS Quadra 01 Bloco H Ed. Telemundi II 
Brasilia DF 
Brazil 
70070-010 
Tel: (55-61) 2108-1414 Fax: (55-61) 2108-1144 
gabinete-snsa@cidades.gov.br
 
Agencia Nacional de Aguas 
SPO, ea 05 Quadra 03 Bloco M 
Brasilia DF 
Distrito Federal 
Brazil 
70610-200 
Tel: (55-61) 2109-5159 Fax: (55-61) 2109-5758 
paulovarella@ana.gov.br
 
Ministerio da Integracao Nacional 
Esplanada dos Ministerios Bl E Sala 900 
Brasilia DF 
Brazil 
70062-900 
Tel: (55-61) 3414-5828 Fax: (55-61) 3414-5493 
marcelo.borges@integracao.gov.br
 
Environmental Screening 
Category 
[
]A   [ X ]B   [  ]C   [  ]FI   [  ]TBD 
Date PID Prepared 
10/01/2010 
Estimated Date of Appraisal 
Completion 
10/08/2010 
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Estimated Date of Board 
Approval 
01/03/2011 
Concept Review Decision 
Following the review of the concept, the decision was taken to 
proceed with the preparation of the operation.  
Other Decision  
 
I. 
Introduction and Context 
 
1. 
Country and Sector Background 
 
1. 
Water is a key element of Brazil’s strategy to promote sustainable growth and a more 
equitable and inclusive society.
 Brazil’s recent achievements in terms of poverty reduction and 
economic development have been closely linked to the expansion of WSS services, to the 
development of hydraulic infrastructure for hydroelectric power generation and, recently, to the 
development of irrigation infrastructure, especially in the Northeast region. Brazil has expanded 
water services to more than 100 million people and sanitation services to more than 50 million 
people, so that according to the last figures of the WHO/UNICEF JMP, 79 percent of the 
population has piped household access to water services and 45 percent has access to sewerage 
services
1
.
(JMP 2006) The generation of hydroelectric power has increased per capita energy 
consumption from 500 kWh to more than 2,000 kWh annually, boosting industrial development 
and it represents 80 percent of the total power generation in Brazil. Over the past decade, the 
area of irrigated land increased by more than one-third to an estimated 4.5 million hectares, with 
potential for further expansion of approximately 30 million hectares when considering the 
availability of suitable land and water resources. Moreover, the development of Brazil’s nascent 
inland waterways is critical for enhancing the competitiveness of the economy, particularly in the 
agribusiness sector, which accounted for 25 percent of GDP in 2007, along with 37 percent of 
jobs and 36 percent of exports and high growth potential. Yet despite these significant 
achievements in the construction of major civil works, expansion of WSS services and water 
resources development, important challenges remain for the country. 
 
2. 
Most of the water challenges stand out for their direct impact on the social and 
economic development of Brazil:
 (a) 
water scarcity
 is prevalent in the predominantly poor 
Northeast region and in large metropolitan areas such as São Paulo; (b) 
water pollution
 is a 
major issue in most urban conurbations because the degradation of water quality compromises 
health and living standards, especially of the peri-urban poor and causes environmental damage 
and increases the cost of water treatment for downstream users; (c) the 
severity of drought and 
flood events
 is increasing and their impacts are likely to be exacerbated by climate change; (d) 
there is 
unreliable access
 to WSS services, especially among the rural and peri-urban poor and 
large investments, estimated at R$220 billion, are required to meet universal coverage; (e) the 
scarcity of water and the access gap of the poor are aggravated by 
service inefficiency
,
particularly high levels of water losses in urban areas, where almost half of the potable water is 
lost in the distribution systems and in semi-arid states where these losses are even as high as 60 
percent; (f) the 
untapped irrigation potential
 is the largest in the world, but modernization is 
required to improve efficiency and productivity; and (g) 
water is important in economic 
1
JMP (2006). When viewed by the broad definition of improved access to WSS services, 90 percent of the overall 
population has access to potable water and 79 percent has access to improved sanitation.  
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development
,
primarily through hydropower and the export-oriented agribusiness sector, both of 
which are essential for sustained growth and increased competitiveness of the Brazilian 
economy. Water resources have been important in working toward social equity and promoting 
economic growth, but further infrastructure development and allocation of water across 
competing uses often involves complex trade between environmental conservation and economic 
development. 
 
3. 
While Brazil possesses 12 to 14 percent of the world’s freshwater resources, water is 
unequally distributed around the country and is increasingly polluted in urban centers. 
The 
sparsely populated Amazon region holds about 80 percent of the water resources, while the semi-
arid states have only 4 percent of the water and 35 percent of the population and the metropolis 
of São Paulo has only 1.6 percent of the water and more than 20 percent of the population. These 
regional inequities in water endowments are mirrored in the population’s unequal access to WSS 
services. In urban areas, where 84 percent of the Brazilian population lives, coverage is 
significantly higher at 96 percent for improved water supply and 83 percent for improved 
sanitation, including 53 percent access to sewerage services, the rest accounted for by on-site 
sanitation. Coverage in rural areas, where 16 percent of Brazil’s population lives, is much lower, 
with 57 percent for improved water supply and only 37 percent for improved sanitation and only 
5
percent of rural Brazilians have access to sewerage services. Geographically, coverage is 
lowest in the country’s poorest regions, such as the predominantly rural North, Northeast and 
Center-West. While access is higher in urban areas, the pollution of urban rivers and streams is 
Brazil’s biggest water quality challenge and continues unabated, as only about 48 percent of 
municipal wastewater is collected and only 32 percent is properly treated. Moreover, dumping 
untreated wastewater into the water bodies further exacerbates the already critical problem of 
water scarcity because it reduces the amount of water readily available for consumption and 
industrial use. 
 
4. 
Following three decades of declining investment, the GoB launched the PAC in 2007 
to boost investment in infrastructure, including the water sector and stimulate economic 
growth.
 Specifically in the water sector, planned PAC investments total about R$90 billion for 
2007–10–, with the most intense focus on hydropower development and WSS infrastructure. 
While over this period WSS investment has increased by 40 percent over the annual average of 
2000–06–, this increased level is still only 60 percent of what is required to achieve universal 
access by 2020 and is insufficient to achieve the Millennium Development Goals. Despite 
available financing, the implementation of infrastructure investments faces a number of 
challenges, such as delays due to inadequate planning and limited institutional capacity. After 
two and a half years of PAC implementation, only 42 percent of the WSS works have been 
completed or are under construction and the implementation of planned irrigation and 
multipurpose water infrastructure investments has been slower than anticipated, especially in the 
Northeast. Moreover, there is the tradition in Brazil of investing in infrastructure without 
adequate attention to the viability and sustainability of these works. Resources that should be 
invested in management, administration and operation and maintenance are more often than not 
allocated to new ventures, resulting in large numbers of in efficient irrigation, water supply and 
sanitation systems. It is critical to assess rehabilitation needs, ensure adequate operation and 
maintenance and make more productive and sustainable use of existing infrastructure, especially 
in the Northeast where a supply-driven investment policy has often led to low productivity of 
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water.
2
Making better use of existing infrastructure is an important challenge and will facilitate 
the effective development of new infrastructure. 
 
5. 
Modernized and more efficient irrigation models are necessary to balance irrigation 
needs in an increasingly water-scarce environment.
 Brazil plays a major role in the world’s 
food supply, exports and agro-energy products, thus making the country one of biggest exporters 
of virtual water in the world. Despite some of the most successful irrigated farms worldwide, 
including the introduction of innovative PPP approaches in irrigation, less than 15 percent of 
Brazil’s irrigable lands are being used for agriculture. The national irrigation policy and law 
under discussion in Congress aims to improve public investment in this sector and the efficiency 
and sustainability of irrigated agriculture. Notwithstanding some beneficial impacts, public 
irrigation development has been less successful than anticipated, mainly due to poor selection of 
beneficiaries, lack of commercial orientation and weak integration with productive chains. Low 
collection of water fees has contributed to the poor operation and maintenance and deterioration 
of public infrastructure. 
 
6. 
Brazil also needs to enhance its institutional capabilities and protect its infrastructure 
to deal with the anticipated impacts of climate change.
 According to a recent study undertaken 
by the Intergovernmental Panel on Climate Change (IPCC),
3
the Northeast will be the Brazilian 
region most affected by climate change. Global warming will not only mean that it will rain less, 
with more intense droughts, but also that groundwater resources will be reduced, with aquifer 
recharge down by approximately 70 percent by 2050. In an optimistic scenario, an increase in 
temperature of only 1
o
C
to 2
o
C
by the second half of the century will reduce rainfall by 10 to 15 
percent in the Northeast, but in a pessimistic scenario with an estimated temperature increase of 
between 3
o
C
to 4
o
C, the corresponding water flow in the São Francisco River will be reduced by 
as much as 15 to 20 percent. Negative effects include prolonged droughts, reduced potential for 
agriculture production and evaporation from lakes, dams and reservoirs. Moreover, long periods 
without rain will be punctuated by brief torrential downpours resulting in floods. Some of these 
effects are already evident in the recurrent flooding and droughts that have caused significant 
social and economic impacts in Brazil. For example, in 2007, 788 Brazilian municipalities 
experienced emergencies due to water shortages, 88 percent of these in the already water-scarce 
Northeast. Another 176 municipalities suffered extreme floods. The increasing frequency and 
severity of drought and flood events requires a systematic and coordinated approach to disaster 
risk management for sustainable investments, emergency response planning to minimize human 
losses and contingency planning to assure continuity of services. 
 
7. 
The challenges in the water sector demand the strengthening of policies and 
coordinated institutional efforts coupled with investment in infrastructure development.
 
Institutional capacity needs to be developed to allow state institutions to effectively exercise their 
functions, plan and implement policies and investments and provide a clear regulatory 
2
In the Northeast, for example, there are more than 30 billion cubic meters in storage capacity in large reservoirs, 
which present high losses, poor maintenance and are often underutilized because expected demands, especially for 
irrigation, have not materialized. Some irrigation perimeters, such as like Jaiba in the State of Minas Gerais, after 
many years, still use less than 20 percent of their allocated water. 
3
Mudanças Climáticas Globais e o Impacto no Bioma Caatinga.
 Ministério da Ciéncia e Tecnologia, Instituto 
Nacional de Pesquisas Espaciais. 
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environment for the water sector. Important policy and legal reforms have been undertaken since 
the mid-1990s with strong presence and support from the Bank, particularly in the WRM and 
WSS sectors, as well as sound environmental practices. The Brazilian National Water Resources 
Policy, established by the 1997 Water Law (Law 9.433), recognizes the public domain of water 
and classified it as a limited natural resource with an economic value, establishing the water 
basin as the territorial unit for the management of the multiple uses of water. The law also made 
clear that WRM should be done in a participatory and decentralized manner. While the law 
embraces all modern principles of WRM, its implementation has been unbalanced. Efforts to 
promote participation and decentralization have not always been accompanied by sound 
management instruments, resulting in weak enforcement of water rights and limited use of 
economic instruments. 
 
8. 
The implementation of guidelines on WSS has been hampered by limited institutional 
capacity and financial sustainability.
 After a decade-long debate, Law 11.445/2007 was 
established to set national guidelines for WSS and focus on sector regulation, planning and 
service provision arrangements as the key drivers for improving coverage and efficiency. An 
essential condition is the implementation of these guidelines and policies at the municipal, state 
and national levels, but this has been disrupted by the general incapacity of many federal 
agencies and service providers to leverage investments. The inefficiency of the majority of WSS 
service providers is reflected in their high costs and losses, low productivity and low operating 
margins. Although decisions restricting public credit were revised in 2003 to permit service 
providers to finance new investments, most of them do not have the required short-term capacity 
to leverage the financial resources for necessary investments. Moreover, capacity strengthening 
is essential to ensure the proper operation and maintenance of WSS infrastructure to improve the 
environmental quality of the watersheds. The low level of institutionalization and lack of 
appropriate scale for service provision also has effects on the management of solid waste and 
storm water. 
 
9. 
Water’s inherent intersector nature calls for better coordination of these institutional 
efforts.
 Some of the most serious problems restricting the role of
 water in Brazil’s development, 
such as pollution scarcity, floods, unequal access and conflicts over water use, have their roots 
and impacts in diverse sectors of the economy, government and society. While it is important to 
foster advancements in each sector, there are also many opportunities for better integration and 
coordination among myriad sectors to reconcile conflicting goals, mobilize interests, avoid 
impasses and setback and spark synergies, as defined in the intersectoral program of the National 
Water Resources Plan. The diversity of Brazil’s physical characteristics, socioeconomic realities 
and institutional structures imposes tremendous challenges related to the management and use of 
water. Renewing its water policies and strengthening investment capacity are essential to ensure 
that the water sector can make important contributions to the reduction of poverty and inequality, 
the protection of the environment and the sustainable growth of the economy. 
 
10. 
Public policies guiding water policies are defined and enforced by a variety of 
institutions at the federal level. 
It is not uncommon that public policies developed for one sector 
affect other sectors and if done in an integrated manner this can bring positive externalities. For 
example, the construction of dams for hydropower generation often expands navigation 
possibilities if done in a planned manner. Similarly, improvements in irrigated agriculture 
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practices can contribute to the protection of water basins that are critical for public water supply. 
The collection and treatment of domestic wastewater generate multiple benefits from improving 
the health of communities living on the banks of water bodies to reducing the costs of 
downstream treatment, not to mention benefits for the ecosystems. The reduction of water losses 
directly contributes to the conservation of water. Given these multiple examples, it is essential 
for the myriad federal institutions operating in the water sector to integrate their planning and 
policies to ensure a coordinated approach to the challenges facing the WRM and WSS sectors in 
Brazil. The following is a description of the main functions and responsibilities of the key federal 
entities involved in the water sector. 
 
11. 
The Brazilian Constitution of 1988 laid the foundation for the National Water Resources 
Management System (SINGREH) to take into account the multiple water uses and their potential 
conflicts. SINGREH consists of a set of legal and administrative mechanisms aimed at 
coordinating, through a participatory approach, the integrated management of water resources 
and at implementing the Water Resources National Policy, adopted by the Water Law No. 9433 
of 1997. SINGREH is composed of the National Council on Water Resources, ANA, state-level 
water resources councils, basin committees, federal, state and municipal bodies responsible for 
water resources management and water agencies. The National Water Resources Policy 
establishes the water basin as the territorial management unit, recognizes the public domain of 
water and classifies it as a limited natural resource with an economic value. The law made clear 
that water resources management should be done in a participatory and decentralized manner and 
that human water supply and livestock needs take priority in situations of water scarcity. While it 
embraces all modern principles of water resources management, its implementation has been 
unbalanced. Efforts to promote participation and decentralization have not always been 
accompanied with sound management instruments, resulting in weak enforcement of water rights 
and limited use of economic instruments. The law established five management instruments: (a) 
water resources plans, (b) classification of water bodies according to prevalent uses, (c) water 
permits, (d) collection of charges for water use, and (e) the National Water Resources 
Information System (SNIRH). 
 
12. 
The current period of robust economic growth has put intense pressure on Brazil’s 
water resources.
 The expansion of industrial production requires water as an input and as a 
direct source of energy and the use of water for hydroelectric power generation and navigation is 
essential to ensure the continued growth and competitiveness of the economy. Economic 
development, however, needs to be balanced to include environmental concerns, not only to 
preserve natural habitats and protect ecological and biodiversity but also to ensure the natural 
resources that will continue to fuel economic growth in the future. 
 
II. Proposed 
Development 
Objective(s) 
 
13. 
The proposed Project Development Objective (PDO) is to support the Government of 
Brazil to improve the coordination and strength the capacity among key federal institutions in 
the water sector toward an integrated approach. 
The key institutions to be strengthened are the 
Ministry of the Environment (
Ministério do Meio Ambiente
,
MMA), the Ministry of National 
Integration (
Ministério de Integração Nacional
,
MI), and the Ministry of Cities (
Ministério das 
Cidades
,
MCid and the 
Agência Nacional de Águas
 (National Water Agency, ANA). At the 
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same time, the Project will focus on achieving effective integrated planning across all water 
sectors. 
 
14. 
Indicators to measure the Project’s progress toward achieving this objective will cover 
three main areas: (a) 
policy
 and regulatory improvements, (b) sector and intersectoral investment 
plans
,
and (c) capacity building (organizations, 
people
,
and skills). The following are the 
Project’s outcome indicators: 
 
•
An interministerial management chamber for water sector programs established and 
functioning regularly with all institutions participating in the Project 
•
Enhanced capacity of water sector institutions participating in the Project at the federal 
and state levels to manage water resources with an integrated approach using modern 
instruments, methodologies, and techniques to design, implement, and monitor plans and 
programs 
•
X
(to be defined at appraisal) water sector activities and projects implemented by 
institutions participating in the Project included in the GoB’s Multiyear Plan (
Plano 
Pluri-Annual
 [[PPA] 2012–15) following an integrated approach, as attested to by an 
independent evaluation. 
 
2. 
Rationale for Bank Involvement 
 
15. 
The proposed Project will help Brazil implement a WRM strategy. Bank-financed 
projects have provided support to the preparation and implementation of a WRM strategy for 
over a decade through federal and state projects.
 The proposed Project is a continuation of 
long-term Bank support to the water sector at the federal and state level. Three federal projects 
(PROAGUA, PMSS and PROSANEAR, described below) have recently closed, while a 
relatively new portfolio of projects in the water-scarce Northeast region (States of Ceará, Bahia, 
Rio Grande do Norte, and Pernambuco) are supporting Brazil to build institutional capacity and 
improved infrastructure to help these states manage their water resources more effectively. 
Lessons learned from the Bank’s long-term involvement in WRM in Brazil as well as the Bank’s 
international and regional experience in implementing a diverse set of rural and urban water 
infrastructure projects give the Bank a comparative advantage over other lenders with the 
implementation of comprehensive institutional reforms to bring coherence to Brazil’s federal 
WRM policies and planning.  
 
16. 
The Bank is well positioned to help address the challenges in the water sector because 
it has long been Brazil’s main development partner in institutional reforms in federal WRM. 
The Bank has accumulated vast experience in financing
 water resources projects in Brazil, 
especially in the Northeast region. Under implementation for the past decade, the Federal Water 
Resources Management Project (PROAGUA) contributed to the development of the water sector 
through its twofold objective: (a) to promote rational and sustainable use and participatory 
management of water resources in Brazil in general and in the Northeast in particular; and (b) to 
provide reliable and sustainable access to water for domestic, municipal and other uses in 
priority river basins in the Northeast. Supported by two Bank loans totaling US$185 million, 
PROAGUA was implemented by the Ministries of Environment and National Integration. While 
initially focused on the semi-arid Northeast, it was later extended nationally and it has been the 
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main instrument to provide support to the creation and strengthening of ANA and to develop and 
implement water management legal and institutional frameworks in the Northeast, coupled with 
investments in priority infrastructure. The project also fostered the development of WRM plans 
in all 26 states of Brazil and the Federal District. The implementation of a comprehensive set of 
criteria to select infrastructure subprojects is among the project’s noteworthy achievements.
4
17. 
The Bank also gained significant experience in the federal WSS sector with the Water 
Sector Modernization Project (PMSS phases I and II).
 PMSS emerged from the context of the 
National Water Supply and Sanitation Policy, developed in 1997, to the provision of WSS 
services to all the population and to improve service delivery efficiency by encouraging a more 
competitive and better regulated environment. Under implementation for roughly the same 10-
year period, PMSS was supported by two Bank loans totaling US$275 million, which financed 
key initiatives such as the groundbreaking National Information System on Water Supply, 
Sanitation and Solid Waste (
Sistema Nacional de Informaões sobre Saneamento
,
SNIS). The 
project also contributed to the development of national and subnational policies and coordination 
among stakeholders, including an important role in the formulation and approval of the Consortia 
Law (No. 11107, 2005) and the National Law on Guidelines for Basic Sanitation
5
(No. 11445, 
2007).
6
PROAGUA and PMSS successfully combined support to the federal government in its 
planning efforts and institutional reforms with support to selected subnational entities (states, 
municipalities, river basin committees and WSS service providers).  
 
18. 
The Low Income Sanitation Technical Assistance Project (PROSANEAR) provided 
technical assistance to the development of participatory engineering designs for use in urban 
upgrading and WSS service provision to the poor.
 The project was designed to tackle some of 
the most important issues facing the WSS sector that contributed to the dismal state of service 
coverage to the urban poor at the time, namely a weak institutional and regulatory framework; a 
lack of incentives, mechanisms and capacity to serve the poor; and ineffective water pollution 
control policies. The targeted beneficiaries were not only the poor living in densely populated 
urban and peri-urban poverty pockets of metropolitan areas but also the agencies responsible for 
policy formulation, planning, implementing and monitoring WSS projects for the urban poor. 
The project aimed to revitalize the national PROSANEAR civil works investment program by 
providing technical assistance to a stock of subprojects and undertaking training programs to 
strengthen the capacity of project executing agencies in preparing and implementing subprojects. 
It also
 worked toward strengthening the GoB’s policy formulation, planning and coordination 
capacity for WSS and urban infrastructure investments in low-income areas. Through the 
incorporation of participatory methods in the preparation of WSS and urban upgrading projects 
in over 30 municipalities, leveraging over US$500 million of investments, PROSANEAR also 
developed a manual and standard terms of reference for undertaking these participatory 
engineering designs. The proposed Project will build on the achievements and the lessons 
learned in PROAGUA, PMSS and PROSANEAR through the provision of technical assistance 
to take advantage of the Bank’s technical capacity to foster integrated approaches based on its 
longstanding experience dealing with similar experiences in global contexts. 
 
4
Report No. 35719-BR, Project Paper: Additional Financing to the Federal Water Resources Management Project. 
5
According to the law, basic sanitation comprises water supply, wastewater, solid waste and urban storm water. 
6
Report No. ICR00001083, ICR for the Second Water Sector Modernization Project 
–
PMSS II. 
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19. 
The Bank has also been involved with important reforms in other water user sectors.
 In 
irrigation, a recent Bank Economic and Sector Work (ESW) in the semi-arid region
7
provided a 
solid analytical foundation for the Bank’s reengagement with irrigation policy in Brazil and for 
the subsequent collaboration of the International Finance Corporation (IFC) and the Bank to 
assist the GoB in preparing PPP projects in irrigation. The Energy Sector TAL (ESTAL) has 
supported the reform program initiated in response to the 2001 drought-induced supply crisis in 
the power sector, focusing on market development and regulation, access and affordability of 
electricity, environmental management, long-term planning and institutional strengthening. In 
addition, improved environmental management and sustainability in the water sector has been 
supported through the Environment Sector TAL (EnvTAL), including assistance to the 
preparation of the PNRH in 2006. In addition, the Bank is an active partner in state and 
municipal-level water investment programs. 
 
III. Preliminary 
Description 
 
20. 
The proposed Project was designed to consider the following issues: (a) 
sectoral 
coordination
 to achieve a consolidated approach to planning as a means of coherently and 
systematically identifying and prioritizing long-term investment needs Sectoral plans have been 
structured in isolation from each other and better coordination among the multiple entities is 
required; (b) 
project quality
 to increase the availability of well prepared and sound projects (in 
terms of quality, sustainability, technical viability and cost-benefit analysis) and the ability to 
bring them to fruition, taking into account the low technical capacity of some executing agencies 
and the lengthy administrative processes (at feasibility study, design preparation, bidding and 
environmental licensing stages). Strengthening public sector decision-making and executing 
agencies’ capacity and streamlining of procedures are among the key solutions to these 
problems; (c) 
regulatory and policy gaps
 to complete the reform agenda and consolidate the 
policy framework in some sectors, eliminating uncertainties and making better use of public 
funds to leverage private investment; (d) 
future investments
 given that the GoB has recently 
announced the preparation of a second phase of the PAC and the proposed Project could also be 
instrumental in the definition of water sector programs to be included in the 2012–15 federal 
government multiyear plan to be approved in 2012; (e) 
linkages between levels of government 
and with service users
 since the federal government plays a key role in water sector investment 
financing, especially for infrastructure development, but well functioning water resources 
systems heavily depend on local arrangements and capacities, solid cooperation agreements and 
clear roles and responsibilities; and (f) 
capacity building
 
to support selected water institutions at 
the federal and subnational levels. 
 
21. 
The proposed Project has five components; the first three of them are designed to 
continue the Bank program of support to ongoing water sector reforms and institutional 
strengthening in individual sectors at the national level. These three components will involve 
three federal ministries, namely the MMA, MI and MCid and the ANA. These three components 
are subsector specific, with individual sectoral responsibility for implementation. Activities to be 
supported will fall into three main categories: (a) planning and management, (b) studies and 
project design and (c) institutional development. Each category will include support at the 
federal and subnational levels. The more innovative fourth component will be cross-sectoral in 
7
Report No. 28785-BR, Irrigated Agriculture in the Brazilian Semi-Arid Region: Social Impacts and Externalities. 
Page  10
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nature and designed to improve implementation performance and coordination of sector policies 
and activities in selected federal river basins. It will promote the multiple use of water in two (or 
three) priority river basins dealing with complex challenges of allocating water across competing 
uses (hydropower, navigation, environmental sustainability, WSS, irrigation). The selection of 
such basins takes into account the need for an integrated planning process, existence of a critical 
mass of plans and studies and opportunity for improved coordination across sectors, levels of 
government and other relevant stakeholders. The fifth component will cover project 
management, monitoring and evaluation. 
 
Component 1: Water Resources Management
 (US$44.3 million) 
 
22. 
Under the responsibility of the MMA and ANA, this component will focus on improving 
the effectiveness of WRM instruments and the implementation of the PNRH, including support 
to: 
·
Planning and management:
 support to the PNRH and state and river basin plans and 
agencies, national and state water resources information systems, water rights 
administration and enforcement systems, use of economic instruments, monitoring of 
water quality and quantity, climate change and adaptation and mitigation strategies; 
·
Studies:
 assessments of water availability and use, water demand analyses and forecast, 
pilot projects on water conservation and reuse, water quality/quantity models, water allo-
cation decision support systems, studies on groundwater use and protection, preparation 
of integrated urban water management strategies and water security studies; 
·
Institutional development:
 organizational structures and business plans, laws and 
regulations, cooperation arrangements, training and capacity-building programs, 
education and public communication programs and creation of water basin agencies. 
 
Component 2: Water Planning, Irrigation and Hazard
 (US$27.8 million) 
 
23. 
Under the responsibility of the MI, this component will provide institutional 
strengthening to water infrastructure agencies at federal and state levels and raise the capacity of 
overall assessment and the level of strategic and operational planning for water infrastructure and 
increase the preparedness of civil defense for floods and droughts. Specifically, it will include 
support to: 
 
·
Planning and management:
 improve the technical capacity of the MI to identify, assess 
and plan irrigation in the country, including technical, environmental, economic and 
management model. Prepare a dam safety policy program; develop flood and drought risk 
identification, prevention and mitigation measures, emergency response plans and 
contingency planning; 
·
Studies:
 revision of existing studies for water infrastructure and irrigation, to include new 
aspects such as climate change, technology and management models, as well as 
economic, social and environmental analysis; asset management models, guidelines and 
manuals, preparation of feasibility studies covering cost-benefit,, environmental and 
social analyses, administration, operation and maintenance (O&M) aspects; flood and 
drought risk assessments and management, considering increased hydrologic variability 
from climate change; 
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·
Institutional development: 
training programs on civil defense, management, design and 
operation of water infrastructure projects, regulatory framework for the irrigation sector, 
new financial arrangements and service delivery models for irrigation (for example, PPP) 
and institutional strategies and cooperation agreements for emergency response and 
contingency planning. 
 
Component 3: Water Supply and Sanitation
 (US$32.5 million) 
 
24. 
This component, under the responsibility of the MCid, will maintain activities initially 
undertaken as part of PMSS with the overall objective to support the implementation of Law 
11.445/2007, specifically in its objective to improve the quality of WSS service provision and 
contribute to promoting universal access to these services. Actions undertaken as part of this 
component include: 
 
·
Planning and management:
 monitoring, evaluation and updating of the national WSS 
plan, implementation of the national WSS information system, regional and local WSS 
plans, studies and models to evaluate WSS investment needs, efficiency-enhancing 
programs and enforcement of performance agreements; 
·
Studies: 
preparation of WSS projects, non-revenue water management projects, utility 
performance benchmarking studies, customer satisfaction surveys, innovative approaches 
and models to expand services to the poor, dissemination of good practices and 
technological improvements; 
·
Institutional development:
 implementation of the national water supply and sanitation 
information system, revision of federal WSS manuals, corporate governance and 
commercial management of WSS utilities, regulatory structures to facilitate access to 
public and private sector financing, capacity building and training for service providers, 
sector planners and regulators and regional models based on consortia arrangements. 
 
Component 4: Intersectoral Coordination and Integrated Planning
 (US$21.0 million) 
 
25. 
This component will focus on integrated planning and actions with a preferential focus in 
selected priority river basins. It will identify areas of mutual interest, overlap and conflicts in the 
sectoral plans and opportunities for win-win or better compromise solutions. The component will 
support complementary studies and institutional improvements involving multiple sectors, 
coordinated by the Project Technical Secretariat inside ANA. In addition, this component will 
support water conservation measures in the targeted river basins. The São Francisco and the 
Araguaia-Tocantins river basins were preliminarily selected by an interministerial group formed 
for the preparation of the Project, which includes the MMA, MI and MCid and also includes 
Ministries of Energy and Transportation as consultative members. Intersectoral activities under 
this component could be complemented by sectoral activities in the same river basins under 
Components 1, 2 and 3. 
 
26. 
The São Francisco (635,000 km
2
)
and the Araguaia-Tocantins (918,000 km
2
)
are large 
multistate river basins under high water demand pressure for multiple uses. In the São Francisco, 
most of the hydropower potential has been developed, but a significant increase in irrigation is 
expected following successful experiences in the Juazeiro-Petrolina region. Over R$5 billion in 
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WSS investments
8
are planned in the basin and a 600-km inland waterway is also under 
consideration. The river basin committee is active and the basin is close to starting to charge for 
bulk water. The key challenges in this basin are water allocation conflicts from competing 
demands and inter-basin transfers. The Araguaia-Tocantins region faces strong pressure for 
hydropower and navigation development. The use of irrigation is increasing to improve 
productivity of the fast growing agribusiness sector. WRM institutional arrangements at the state 
and basin levels are very incipient and there are low levels of WSS service coverage (only 8 
percent of urban wastewater is collected), which poses additional threats to water quality and the 
environment. Improved WRM, environmental sustainability and integrated water investment 
planning are the key challenges. A Strategic Environmental Assessment (SEA) has been 
prepared for the Araguaia-Tocantins and the project will support its follow up and the 
preparation of a SEA for the São Francisco river basin. The Project will strengthen the 
institutional capacity of the project implementing agencies regarding social and environmental 
issues and will follow up on the recommendations and guidelines defined in the SEA. 
 
Component 5: Project Management, Monitoring and Evaluation
 (US$4.5 million) 
 
27. 
This component will support the management, monitoring and evaluation of the project 
in the implementing agencies. The Project Technical Secretariat (
Secretaria Técnica do 
Programa
,
STP), which will be created within ANA, will take a leading role to coordinate the 
different project activities at the federal, basin and state levels. STP will also provide support to 
all operational aspects of the Project and monitor and evaluate all the interventions undertaken to 
ensure that they meet the targets, timetables and objectives originally agreed by the 
interministerial management committee as described in paragraph 44 of the PAD. It will also 
carry out the overall administration duty, including reporting, financial management and auditing 
of the Project. ANA will function as the liaison for all PNUs and will provide support and 
coordination to the entire project. The past experience of ANA in the successful implementation 
of PROAGUA water management component will provide the leadership and ensure knowledge 
transfer to the participating agencies. 
 
28. 
 To ensure effective transfer of knowledge and use of best practices at the subnational 
level this component will include a strong communication program, with workshops and 
seminars to inform all the relevant stakeholders at the basin, state and federal levels. 
 
3. Financing 
Source: ($m.) 
Borrower 32.53 
International Bank for Reconstruction and Development 
97.819 
8
The plan envisions investments of R$5.2 billion over ten years, with R$91.5 million (1.8 percent) for the 
implementation of SINGREH, R$141.8 million (2.7 percent) for the sustainable use of water resources and 
environmental recovery, R$128 million (2.5 percent) for services and works for water resources and land use 
management, R$465.1 (8.9 percent) for water sustainability in the semi-arid region, R$1,388.4 million (26.7
 
percent) for services and works for environmental water supply and sanitation in the semi-arid region and R$2,984.8 
million (57.4 percent) for services and works for environmental water supply and sanitation outside the semi-arid 
region. Over half of this investment comes from federal resources and another quarter comes from state budgets and 
the rest is financed from public service concessions, water charges, municipal and state hydropower compensation 
and the Global Environmental Facility(GEF). 
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Total 130.344 
 
4. Implementation 
 
29. 
The Federative Republic of Brazil is the Borrower
.
Since one of the Project’s main aims 
is to promote coordinated planning and implementation of water policies among the Ministries of 
Environment, National Integration and Cities and ANA, all four institutions have the 
responsibilities of implementing agencies, under the coordination of ANA, through the STP. 
Specifically, the MMA, through SRHU and ANA is responsible for implementing Component 1 
on WRM; the MI, through SIH and SEDEC, for Component 2 on water, irrigation and hazard 
management; and the MCid, through SNSA, for Component 3 on WSS. PMUs will be created 
under each of the three ministries and ANA to implement activities directly tied to their specific 
components. In addition to implementing its own activities, ANA, through STP, will be 
responsible for the overall project coordination and the coordination of the execution of the 
intersector component activities delegating responsibility for specific activities to those 
ministries most directly linked to the actions being undertaken. 
 
30. 
An interministerial management committee (
Comitê Gestor do Programa
,
CGP) was 
formed by the three implementing ministries and ANA to oversee project implementation and 
decide on higher-level strategic issues of an intersectoral nature. The committee includes the 
Ministries of Energy, Transportation and Agriculture as consultative members. The CGP will 
define what is of common interest across components, oversee project implementation, evaluate 
results and agree on criteria for the allocation of loan proceeds depending on institutional 
performance and the need for institutional strengthening. The CGP will also be responsible for 
approving the Annual Operational Plan (POA) for the Project. Project funds will be assigned to 
different components in accordance with implementation performance and evolving needs and 
priorities and agreed with the Bank. The detailed arrangements, including the appropriate 
environmental and social arrangements, will be included in the Project Operational Manual 
(
Manual Operacional do Projeto
,
MOP).  
 
31. 
Project subnational support will be targeted to those entities (state and municipal water 
institutions, river basin agencies, service providers and so forth) that demonstrate strong 
commitment to advance reforms and improve performance in the water sector. The MOP defines 
and details the specific criteria and mechanisms that were developed during preparation to 
determine how subnationals will engage and have access to project support under each 
component. These criteria include the following: (a) the activities proposed need to be approved 
by the management committee, (b) the subnationals should submit a specific funding request and 
proposal including clear demonstration of institutional capacity to follow up activities 
preparation and implementation, (c) the proposals should be consistent with existing sectoral 
plans or programs, (d) the proposals should be approved by the relevant basin committees, (e) 
the interventions proposed should have an impact on the productive and sustainable use of water, 
and (f) the proposed interventions should preferably be co-financed by the subnationals. In 
addition, clear rules of engagement were established for potential beneficiaries at different levels 
of capacity, from basic support to improve performance of weaker institutions to strategic 
engagement with stronger agencies that are willing to push the envelope addressing more 
advanced and complex issues. 
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5. Sustainability 
 
32. 
All project components are directly related to increasing the sustainability of water 
through more effective management of water resources to improve the effectiveness of 
instruments and the implementation of national plans; more efficient irrigation and natural 
disaster preparedness strategies, increased provision of WSS services to improve the living 
standards of the poor, control and reduce the pollution from untreated wastewater and support 
the implementation of Law 11.445 and to control water pollution; and intersectoral coordination 
and integral planning to identify and resolve conflicts in sectoral plans and to identify 
opportunities for compromise solutions that increase the sustainability of the targeted river 
basins. In addition, the overall focus on institutional capacity building, policy development and 
strategy refinement for WRM and WSS will also contribute to the sustainability of activities.  
 
6.  Lessons Learned from Past Operations in the Country/Sector 
 
33. 
Drawing on lessons learned from long-term Bank involvement in the federal WRM and 
WSS sectors in Brazil, work supported by the aforementioned Bank-financed projects has 
confirmed valuable lessons concerning effective measures to implement institutional reforms. 
 
34. 
There was initially considerable wariness on the part of the GoB concerning the Bank’s 
priority for sector reforms under PMSS, but the strong partnership and commitment achieved 
provided for excellent outcomes under very challenging circumstances and provided a solid 
foundation for future sector engagement at the federal and subnational level. The project’s think-
tank role and its contribution to sector knowledge management helped to maximize impact. A 
project grounded on technical assistance can actively contribute to sector reform by: (a) working 
as a think tank to promote national debate on key issues, helping to channel differences and 
achieve consensus among key stakeholders; and (b) generating solid analytical materials (studies, 
information systems) on which to base decision making. PMSS was able to fulfill this role 
through the preparation and dissemination of solid analytical work, which has been extremely 
valuable for other Bank-financed projects.  
 
35. 
The experience of PMSS also demonstrated that structural sector reform processes have 
their own pace and timing. A wide-ranging reform in any sector will require the participation of 
key stakeholder groups and firm government commitment. The experience shows the importance 
of treating the institutional objectives as long-term programmatic engagements rather than 
projects and this requires persistence, patience, follow-up and flexibility by the Bank team. 
Though in the PMSS case the outcomes achieved and the current level of GoB ownership overall 
are thought to ultimately justify the long engagement under the project, an early restructuring of 
project objectives or a cancellation if they cease to be relevant as defined (that is, a change of 
government priorities vs. stated project objective), might be warranted to overcome stagnation 
and long implementation delays, since these affect the efficiency of operations and pose 
difficulties in assessing both Bank and Borrower performance.
9
9
Report No. ICR0000719, ICR for the Low Income Sanitation Technical Assistance Project (PROSANEAR). 
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36. 
The experience of PROSANEAR is another case in point, when the Bank was confronted 
with significant shifts in political realities on the ground, but these changes were not well 
captured in project design and implementation. The PROSANEAR-TAL project was approved at 
the end of 2000 but went through many political and administrative changes at the federal, state 
and municipal levels that affected both project design and implementation. A lesson learned from 
this project is that doing business in increasingly decentralized and politically complex 
environments will require flexibility and adaptability if Bank projects are to remain relevant to 
the borrower and implementers, but such flexibility will also result in additional time and 
resource costs to the Bank.  
 
37. 
In countries like Brazil the Bank’s comparative advantage is providing investment funds 
and delivering knowledge that can significantly leverage the effectiveness of these funds. 
Operational tools have different potential to affect reforms. TALs, for example, have often 
lacked the financial leverage implicit in a Specific Investment Loan (SIL). TAL projects should 
provide sufficient incentives to ensure that the anticipated leverage can take place and should 
consider: (a) whether lessons learned from related SILs can be directly transferred to TALs; (b) 
the results frameworks (including a set of appropriate outcome and output indicators) of such 
operations should be adjusted to the limitations of what a TAL can actually achieve; and (c) 
implementation arrangements have to be crafted to ensure sufficient incentives to encourage 
improved performance. 
 
38. 
A
centrally coordinated and controlled project, which is implemented at
 
a
decentralized 
level, as was the case of the PROSANEAR-TAL, necessarily involves a large number of actors 
and tradeoffs with regard to the agility of implementation. To be inclusive in such cases means 
adding to complexity by involving more stakeholders in project implementation. This has 
resulted in complex institutional arrangements in this project. The MCid and its Project 
Implementation Unit (PIU), the 
Caixa Econômica Federal
 (both at the federal and 
municipal/state level), municipal governments and their PMUs, service providers, consulting 
engineering firms, community organizations and the Bank all participated in and contributed to 
the project’s implementation. The many different relationships, which often come with their own 
ways of doing business, may result in misunderstandings, variations in implementation 
modalities and a need for extensive learning processes (for instance, if institutions are required to 
learn Bank procurement processes) which, in turn, may result in high transaction costs and result 
in implementation delays. For complex projects of a similar nature, it is important to determine 
up front what the possible implications of these transaction processes are regarding time, cost 
and real risk to ensure that sufficient consideration is given to them in terms of the impacts on a 
project’s implementation schedule, disbursement profiles, training and other technical assistance 
needs to stakeholders and supervision costs.  
 
39. 
Initial lessons learned from the PROÁGUA Project, which recently closed, include the 
following: (a) i
n
sophisticated Middle Income Countries (MIC) such as Brazil the use of country 
systems for financial management, procurement and safeguards has improved client interaction, 
expedited implementation and made Bank loans more attractive; (b) MICs such as Brazil are 
primarily interested in the Banks technical expertise and ability to act as an honest broker;; and 
(c) the Bank needs to ensure proper monitoring of outcome indicators and avoid the tendency to 
report on the status of outputs. 
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40. 
The inclusion of disaster risk management aspects in this operation has taken into 
account the lessons learned from previous global disasters and lessons from 25 years of Bank 
operations and programs in the area of disaster risk management. The World Bank Independent 
Evaluation Group (IEG) report, 
Hazards of Nature, Risks to Development: an Evaluation of 
World Bank Assistance for Natural Disasters
 (2005), recommends that the Bank assist its clients 
most vulnerable to natural disasters to shift from focusing entirely on disaster response to 
implementing programs and policies for comprehensively managing disaster risk. 
 
IV. 
Safeguard Policies that might apply 
 
41. 
The proposed Project is expected to have positive environmental impacts by improving 
the capacity of government water sector institutions and focusing on integrated planning across 
sectors to achieve the sustainable management and use of water resources. Project activities are 
designed to enhance and provide protection to the environmental functioning of the predominant 
ecological system, protect wetland biodiversity and implement strategic activities that address 
the root causes of environmental degradation. The strengthening of basin institutions responsible 
for WRM, the generation and dissemination of information and the integration of environmental 
concerns into water basin economic development activities on a sustainable basis are key 
elements of this project. 
 
42. 
Environmental Assessment (OP 4.01).
 The proposed Project has received an 
Environmental Category B rating in accordance with the corresponding safeguard policies. 
Although , at this point, no physical works are going to be supported by the Project, the studies 
and plans financed through technical assistance activities (e.g. feasibility studies, engineering 
designs) 
will incorporate Bank’s safeguards. An Environmental and Social Management 
Framework (ESMF) was prepared to ensure that:  
 
•
Studies and strategic plans or complementary environmental and social analysis fully 
reflect and are consistent with the Bank’s social and environmental safeguards. 
•
All documentation is disclosed and consultations were held with relevant stakeholders 
and future affected communities on studies, assessments and their results. 
•
All Bank environmental and social safeguards are adequately addressed (natural habitats, 
forests, pest management, physical cultural property, indigenous people, involuntary 
resettlement and safety of dams). 
 
43. 
This ESMF was prepared by the Borrower and reviewed by the Bank during project 
preparation and it will be part of the project legal documents.  
 
44. 
The Project will encourage the use of SEAs in river basin planning to identify and assess 
the cumulative and broader environmental impacts of plans and the complex system dynamics in 
watersheds; achieve global environmental benefits where feasible, better understand the different 
demands on water resources (for example, agriculture, forestry, fisheries, energy, industry, 
transport, sanitation, tourism, biodiversity conservation and ecosystem services); and ensure that 
direct, cumulative and broader impacts are taken into account in the planning process. As part of 
Page  17
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project preparation, the Bank has (a) reviewed the Tocantins-Araguaia river basin and (b) 
supported the Borrower in the preparation of the ToRs for an
 SEA for the São Francisco river 
basin, to be carried out during project implementation.  
 
45. 
The Project will also strengthen the institutional framework for addressing environmental 
and social issues through basin-wide planning by: (a) enhancing the capacity and coordination 
between government institutions in decision making and implementing public policies that 
support the sustainable use and conservation of water resources; (b) integrating environmental 
and social considerations in strategic plans and criteria in the selection of future investments; (c) 
developing and implementing conservation and sustainable use of water resources, resulting in 
decreased water pollution, soil erosion, improved recovery of critical habitats and conservation 
of biodiversity; (d) developing innovative tools, such as satellite remote sensing, for assessing 
water resources, particularly for diagnostic and monitoring; (e) introducing innovative policy 
instruments, such as water charges, for more efficient water use and improved water and natural 
resource protection; and (f) creating a framework to enhance public and stakeholder participation 
in the strategic planning and specific project preparation and implementation process. 
 
46. 
Natural Habitats (OP 4.04).
 As part of the project’s river basin management approach, an 
inventory of critical habitats and protected areas 
will
 be carried out at the river basin level. The 
ESMF includes measures to protect these areas and ensure that development will respect fragile 
ecosystems and minimize potential impacts. 
 
47. 
Forests (OP 4.36). 
The measures taken to address the requirements of OP 4.04 will also 
address the needs of OP 4.36 for this Project. 
 
48. 
Pest Management (OP 4.09) 
The Project will help better understand the impact of 
pesticides, especially from agricultural activities in irrigation areas, on water quality and 
resources and will support the development of improve pest management practices and control 
measures that are environmentally sound and economically feasible. 
 
49. 
Physical Cultural Resources (OP 4.11)
 Under Brazilian legislation, provisions for the 
protection of cultural property are part of the environmental licensing procedures. The National 
Institute for Historical, Artistic and Cultural Heritage (
Instituto do Patrimônio Histórico, 
Artístico Nacional
,
IPHAN) is the Brazilian institution responsible for handling archeological 
and cultural property issues. Whenever “chance findings” occur it is mandatory, under federal 
and state law, for Brazilian government agencies to seek IPHAN’s support to address “chance 
finding” issues. The Project will include a Physical Cultural Resources Guide that will ensure 
national legislation is duly followed. 
 
50. 
Indigenous Peoples (OP 4.10)
 Given that the project area potentially encompasses the 
entire area of the Federative Republic of Brazil, any of Brazil’s estimated more than half a 
million indigenous peoples may potentially be affected. Although the Project does not finance 
any infrastructure or other physical investments, a social assessment was conducted and its 
findings have been used in the preparation of an Indigenous Peoples Planning Framework (IPPF) 
that applies to the studies and plans supported under this operation. 
 
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51. 
Involuntary Resettlement (OP 4.12)
 The Project does not require any land acquisition or 
impose any restrictions on access to land or associated resources. However, the potential impacts 
of future investments, the feasibility of which will be studied under the project, might include 
involuntary resettlement. Because the location, timing and technical features of such potential 
investments remain unknown at this time, a Resettlement Policy Framework (RPF) was 
prepared. A social assessment of the affected peoples was undertaken to inform the design of the 
RPF. The RPF requires that land acquisition be avoided or minimized by modifying the technical 
design of the projects as much as feasible. If land acquisitions and/or involuntary resettlement 
prove unavoidable, proper participatory mechanisms will be used to ensure that affected peoples 
are consulted on their preferences. Alternative housing and livelihood arrangements at least 
equivalent to the old site have been included for the affected peoples. 
 
52. 
Safety of Dams (OP 4.37)
 Based on the 
successful
 experience in the State of Ceará, the 
project will help adapt the existing state framework for the national level and disseminate lessons 
learned to other states. 
 
53. 
In view of its technical assistance character, the 
project
 does not have any 
physical investments and is not expected to have any direct adverse social impacts. 
Instead, the project should have significant impacts in terms of strengthening local 
capacity to manage the social aspects of future basin-wide development and 
improving the quality of both planning and implementation. While the Pr
oject’s 
broad national focus makes it difficult to assess the social impacts of the proposed 
activities, the intersectoral component will specifically focus on two river basins in 
predominantly poor regions of Brazil, namely the São Francisco, in the Northeast 
and the 
Araguaia-
Tocantins, in the North. The São Francisco, for example, contains 11 of the 
poorest 100 municipalities in terms of their human development index, notably in the states of 
Bahia, and Alagoas. Moreover, while 94.4 percent of the population living in the river basin has 
access to water supply, only 62 percent has access to sewerage services. The project will not 
directly assist the poor through the provision of these services, but it will strengthen the 
management of water resources to ensure that this essential resource is distributed more fairly 
and efficiently. 
 
54. 
The Project will assist the government to assess salient issues and design 
social and environmental management systems to facilitate planning for activities 
needed to address the potential social impacts of future water sector investments. 
For example, given that the project area potentially encompasses the entire 
country, any of Brazil
’s estimated more than half a million indigenous peoples may 
potentially be affected. The Borrower conducted a social assessment, and its 
findings have been used in the preparation of an Indigenous Peoples Planning 
Framework (IPPF) that applies to all the studies and plans financed through the 
project. Similarly, although the project supported activities do not require any land 
acquisition or impose any restrictions of access to land or associated resources, the 
potential impacts of the future investments being studied could include involuntary 
resettlement. For this reason the Borrower prepared a Resettlement Policy 
Framework (RPF) that will apply to all activities financed by the project. The IPPF 
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and RPF were discussed during the public consultations held in Brasilia on 27 
August, 2010 with close to 120 representatives of various governmental and civil 
society organizations. The main project implementation agencies have sufficient 
staff and adequate capacity to implement these frameworks. Finally, in order to 
ensure effective transfer of knowledge and use of best practices at the sub-national 
level, the project includes a communication program with workshops and seminars 
to inform all the relevant stakeholders at the sector, basin, and state levels. 
The 
results of the social assessment, consultations and the IPPF and RPF are summarized in Annex 
10 and they were considered highly satisfactory from the comments received. There is also a 
genuine interest from state governments to participate in the implementation of Interaguas. 
 
The GoB has developed a set of frameworks to address environmental, indigenous people and 
resettlement risks in the project. These frameworks were discussed with relevant groups during 
the consultations that took place during project preparation. The GoB understands and agrees 
that the frameworks apply to all activities financed by the Project and their capacity to 
implement these norms is considered adequate. The main institutions are adequately staffed and 
have widespread presence in the territory. Each state also has an active Public Ministry to 
oversee public sector compliance with its own norms and procedures. In addition, efforts to build 
capacity in the implementation of the frameworks is also included as part of the project. Finally, 
Bank supervision will closely follow the progress in streamlining social and environmental 
concerns during the implementation phase. 
The following safeguard policies apply to the project: 
 
Safeguard Policies Triggered by the Project
 
Yes
 
No
 
Environmental Assessment
(
OP
/
BP
4.01) [X] 
[ 
] 
Natural Habitats (
OP
/
BP
4.04)
 
[X] [ 
] 
Pest Management (
OP 4.09
)
[X] [ 
] 
Indigenous Peoples (
OP
/
BP
4.10)
 
[X] [ 
] 
Physical Cultural Resources (
OP/BP 4.11
)
[X] [ 
] 
Involuntary Resettlement (
OP
/
BP
4.12)
 
[X] [ 
] 
Forests (
OP
/
BP
4.36)
 
[X] [ 
] 
Safety of Dams (
OP
/
BP
4.37)
 
[X] [ 
] 
Projects on International Waterways (
OP
/
BP
7.50)
 
[
]
[X] 
Projects in Disputed Areas (
OP
/
BP
7.60)
*
[
]
[X] 
7. 
List of Factual Technical Documents 
 
·
ANA: Planejamento Estratégico, 2009-2010.
 
·
Carta-Consulta Programa de Desenvolvimento do Setor Água: INTERAGUAS.
 
·
Mudanças Climáticas Globais e o Impacto no Bioma Caatinga. Ministério da Ciéncia 
e
Tecnologia, Instituto Nacional de Pesquisas Espaciais
.
·
Project Appraisal Document for the Federal Water Resources Management Project 
(PROÁGUA). 
*
By supporting the proposed project, the Bank does not intend to prejudice the final determination of the parties' claims on the 
disputed areas
 
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20
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·
Project Appraisal Document for the Low Income Sanitation Technical Assistance 
Project (PROSANEAR) and its ICR Report No ICR0000719. 
·
Project Appraisal Document for the Second Water Sector Modernization Project 
–
PMSS II and its ICT Report No ICR00001083. 
 
8. Contact point 
 
Contact: Manuel Contijoch Escontria 
Title: Senior Water Resources Spec. 
Tel: (202) 473-3919 
Email: mcontijoch@worldbank.org 
 
9. 
For more information contact: 
 
The InfoShop 
The World Bank 
1818 H Street, NW 
Washington, D.C. 20433 
Telephone:  (202) 458-4500 
Fax:  (202) 522-1500 
Email: pic@worldbank.org 
Web: http://www.worldbank.org/infoshop